Google results beat expectations, but fail to impress investors

Internet firm Google has reported better-than-expected revenues of $6.77bn for the first three months of 2010, delivering earnings of $6.76 a share compared with forecasts of $6.60.

Internet firm Google has reported better-than-expected revenues of $6.77bn for the first three months of 2010, delivering earnings of $6.76 a share compared with forecasts of $6.60.

Analysts said the results showed Google was able to shake off the effects of the online advertising recession, with revenues climbing 23% compared with the same period last year.

"Google performed very well in the first quarter, with 23% year-over-year revenue growth driven by strength across all major verticals and geographies," said Patrick Pichette, chief financial officer at Google.

"Going forward, we remain committed to heavy investment in innovation, both to spur future growth in our core and emerging businesses and to help build the future of the open web."

However, Google's shares were down almost 5% in after-hours trading, which analysts ascribed to uncertainty about the company's future in China and concern about its growing number of employees and expenses, according to US reports.

Google has hired nearly 800 staff since the start of 2010 and said it planned to spend heavily on further recruitment, acquiring smaller companies and developing more diverse products.

In a conference call for investors, Pichette said Google planned to keep hiring staff, particularly in engineering and sales to fuel its growth.

He defended Google's decision to move its search operations from mainland China to Hong Kong, saying it was a tough decision but the company believed it had made the right choice. He pointed out that Google still had engineers and marketing personnel in mainland China.

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